Re: Signature aggregation for scaling - what is possible?
Let's not confuse things here. Lightning may not enable 5bn people to settle their balance on-chain, but it definitely is trustless. There should be no doubt about that.
Agreed.That's an interesting thought; I understand where you're coming from. One could argue (similar to the question 'what to do after the block subsidy ends in 2140') that it's a problem for later and that it's pointless to put in time looking for solutions right now.
Another reply I can give you is that there are ideas, theories and models (not sure whether also prototypes) for even higher layers. The high-level idea is that there will never be 5bn Lightning operators, but merely a few thousand (like now) who can thus also settle on-chain if needed. Common users would operate on an even higher layer, using Lightning as the settlement layer.
That's something I didn't think of. I have to think about that a bit more.Another reply I can give you is that there are ideas, theories and models (not sure whether also prototypes) for even higher layers. The high-level idea is that there will never be 5bn Lightning operators, but merely a few thousand (like now) who can thus also settle on-chain if needed. Common users would operate on an even higher layer, using Lightning as the settlement layer.
In any case, I'm officially coining the term Lightning2 haha.
In the scenario I described above then, you would not create or open Lightning channels with 1m sats, but be a higher-level user that merely uses technology leveraging such channels. Operators will either have channels from 'cheaper times' (like now) or invest thousands or even millions to create a reasonably sized Lightning channel and do their best to find reliable channel partners & keep it open for as long as possible (best-case forever).
For sure, agreed that it would be ridiculous to open such a small Lightning channel especially if an on-chain txn is 100,000 sats.And yes, I think you might be right about L2 being only used by higher-level users, a la Lightning2
True, but that will never work on-chain. Either L2, L3 or another off-chain mechanism is required for that.
Agreed.If a settlement is shut down for whatever reason, any settler from that settlement can start a connection with any other settlement, send them a BIP322 signed transaction for the 1-of-N MuSig (to prove that they were part of a pool). Once the settlement verifies the signature, the settler can send a proper 1-of-N MuSig transaction for the desired amount [of course this tx will be invalid on-chain, because the 1-of-N MuSig is not funded]. The settlement will then make an entry in its database to credit whatever addresses were specified inside it with their respective amounts, when the next block is mined and a global M-of-N MuSig transaction is made for it.
Settlement pool owners earn fees proportional to the volume of transactions they process, so all tx fees for L1 will be paid from settlement pool fees.
Settlement pool owners earn fees proportional to the volume of transactions they process, so all tx fees for L1 will be paid from settlement pool fees.
Are you saying if a settlement pool goes down, that *every user* from that settlement must create an on-chain transaction, or only one user from that pool?
If the former, then we are back to square one. If the latter, then I need more time to wrap my head around this.
Each of them may only increase by a factor of 5 (example number), but if you combine them you could get 25x improvement. Obviously it's not enough to billion users, but i'd take small improvement over nothing. Besides, IMO it's just matter of time before block size is increased and it'll be faster if Bitcoin community want higher transaction throughput.
The point of bitcoin is decentralisation, and throughput scales only linearly with block size (obviously).
As block size limit is increased, the number of node operators must decrease - i.e. everyone running a node on a Raspberry Pi and 1TB external hard drive will have to buy 10 or 100x the storage.
Actually it's a bit of a catch 22. If we:
a) keep the block size the same, this necessitates the use of Bitcoin banks. If you are storing all your funds in a Bitcoin bank, then running your own node is pointless, because the bank has ultimate control over your BTC.
b) increase the block size 100x say, this would permit individuals to continue transacting on-chain in a hyperbitcoinised world, but it would also drastically increase the hardware requirement to run your own node, making it much more difficult for the average person to run their own node.
I think ultimately Bitcoin banks are the future. The vast majority of people will never run their own node, regardless of the barrier to entry. Sure, you will have to trust the bank with your coins, but I think that is fine. If a bitcoin bank tries to run off with 100,000 customer's coins, there are not many places in the world they would be able to hide from the 100,000 strong angry mob that would form.
But, for once more, you use numbers that aren't backed by facts. Paying 100,000 for an on-chain transaction is already untenable, and such transaction would be considered overspent in fees. Such fee would make some sense if all the billion users tried to open a channel within October.
There is a fixed supply of block space. Supply of block size is completely inelastic.
The math is very simple.
For a billion users, that would be one channel open/close txn per person per ~4 years.
That is not enough.
Besides that, Lightning cannot cover a billion users alone. The simple answer is that if there's demand for something, it will be supplied. See Lightning. Before 2017, people paid nickles in fees, but an abrupt rise in median fee incentivized some hobbyists to take it one step further. Currently, fees are also nickles. Precisely, and at the time speaking, it costs less than 5 cents to have your transaction confirmed with low priority.
The kind of scaling achieved by Lightning is only good for scaling the number of payments possible for the same size set of users, but it DOES NOT address user scaling.
The whole point I'm making is that I don't believe it is possible to scale the number of users without changes to L1 and even then I don't think it is possible without a 100-1000x block size increase, or some cryptographic black magic fuckery.